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ExxonMobil (XOM) Expects Texas Storm Impact on Q1 Earnings

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Exxon Mobil Corporation (XOM - Free Report) recently expressed concerns regarding the Texas winter storm having hit its first-quarter 2021 earnings by as much as $800 million.

Notably, the brutal storm in February caused havoc to power and water systems in Texas, thereby hurting the company’s production and sales volumes. However, the leading integrated energy company now projects a significant improvement in results for its three key business lines.

The company projects operating results in the first quarter from oil and liquids businesses to improve $1.6 billion to $2 billion as compared to the December quarter of 2020, thanks to an uptick in oil prices. The hike in natural gas prices is likely to have contributed another $300 million to $700 million to profits of the upstream business, as forecasted by the energy major. It is to be noted that the rolling out of coronavirus vaccines, which led to expectations that economies will rebound strongly later this year, primarily helped commodity prices move north in the March quarter of 2021.

Moreover, ExxonMobil estimated $300 million to $500 million of a sequential improvement in profit from the downstream business in the March quarter, thanks to strong refining margins. From the chemical business, the company estimated higher profit of $400 million to $600 million owing to healthy chemicals margin.

Currently, ExxonMobil sports a Zacks Rank #1 (Strong Buy). Other prospective players in the energy sector include Diamondback Energy, Inc. (FANG - Free Report) , Matador Resources Company (MTDR - Free Report) and Magnolia Oil & Gas Corporation (MGY - Free Report) . All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Diamondback is likely to see earnings growth of 112.5% in 2021.

Matador is likely to see earnings growth of 300% in 2021.

Magnolia Oil & Gas has witnessed upward earnings estimate revisions for 2021 earnings in the past 30 days.

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